According to the corruption perceptions index 2012, India got the score of 36, and China got the score of 39, the lower score means the country is highly corrupt In the public sector. Therefore, China Is more attractive to foreign Investors In terms of the corruption level. As for political risk, thanks to corruption and the departure of several key allies for India, the government has been weakened in India, which make India less attractive for foreign Investment to compare with China.
As for protecting Intellectual property right, the provisions of Intellectual property right In India Is more comprehensive than Chinese, which ensures foreign companies get an easier access to take control of Intellectual property in India. According to the data from Global EDGE, Chinese government provides more protections on labors to compare with India. Which Is a good sign for encouraging FAD In China. According to Ease of Paying Taxes Index on Global EDGE website, which ranks the country based on their total tax rate as well as measuring the administrative burden of paying taxes.
India ranked 152 and China ranked 122; this indicates that compare with doing business In India, foreign companies may not have much pressure of paying tax for the overspent in China, which is positive sign for foreign companies to expanded to Chinese to get rid of the high tax rate. As for economic system, both of China and India used to be in the command economy, but they have reformed their economy system to mixed economy in 1978 and 1991 respectively. From my perspective, the early reform of Chinese economy provides a rapid development of the economy In China, which contributes to the higher GAP compare with India now.
The economic growth of India is constrained by the inadequate infrastructure, which may creates obstacles for foreign Investment. As for cultures, business norm and ethic, India goat huge number of well-educated people skilled In English skill, which Is easier for foreign investors to overcome the languages barriers to compare with China. The religion is a factor which foreign investor has to take into account when they want to are widely differ from different religions, which take time to understand those value and norms when doing business among Indians.
According to data from The Hefted Center, China and India almost had the same score in power distance, electives culture, masculinity and uncertainty avoidance, but China is more long- term oriented, the investment is tend to be more long-term projects for instance, the real estate. From my perspective, choosing India to invest is a wise decision, the main reason I recommend the India for foreign investment is that companies may not face as much as competition in India compare with China. There are a huge number of multinational firms in China; it is more difficult to be successful due to the fierce competition in China.
As for India, where had a more comprehensive legal system, which can reduce the cost of doing business and improve the security of foreign investment. The democratic society may offer more opportunities for foreign investors as well. The India cannot surpass China within a short period of time because of the inadequate infrastructures; the inadequate infrastructures is the key factor which constraints the economic growth in India. It is capital and time- consuming to build infrastructures within a short period of time.
